New home sales in the U.S. saw a sharp and unexpected drop in June, according to a report released by the Commerce Department on Wednesday, although the report also showed upward revisions to the data for the three previous months.
The Commerce Department said new single-family home sales for June came in at a seasonally adjusted annual rate of 350,000.
The annual rate for June reflects an 8.4 percent drop from the revised May sales rate of 382,000 and comes in well below the 370,000 sales rate most economists had predicted.
The revised May rate compares to the 369,000 previously reported and is up by 6.7 percent compared to the revised April rate of 358,000.
With the unexpected decrease in June, new home sales fell to their lowest rate since January after reaching a two-year high in May.
Despite the monthly drop, the June new home sales rate represents a significant 15.1 percent increase compared to the same month a year ago.
Noting the volatility of the monthly sales numbers, Teunis Brosens, Senior Economist at ING Bank, said, "That's why we prefer looking at the trend in new home sales."
"Even including this month's setback, the trend remains positive," he added. "Sales are improving slowly but steadily, led by improving homebuilder confidence."
The median sale price for new homes fell to $232,600 in June from $237,100 in May. The median sale price is down by 3.2 percent year-over-year.
According to Commerce Department figures, the seasonally adjusted estimate of new houses for sale at the end of June was 144,000, representing a supply of 4.9 months at the current sales rate.
Regional data showed an 8.6 percent drop in new home sales in the South, the nation's largest housing market, while the smaller Northeast market saw a steep 60 percent decline.
Meanwhile, new home sales ticked up by 2.1 percent in the West and increased by a more substantial 14.6 percent in the Midwest.
Existing home sales also showed an unexpected drop in the month of June, according to a report released by the National Association of Realtors last week.
NAR said existing home sales fell 5.4 percent to an annual rate of 4.37 million in June from an upwardly revised 4.62 million in May. The drop surprised economists, who had expected existing home sales to climb to 4.65 million from the 4.55 million originally reported for the previous month.
Lawrence Yun, NAR chief economist, said, "Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities."
Thursday morning, NAR is due to release a separate report on pending home sales in the month of June. Economists expect pending sales to edge up by 0.9 percent in June after surging up by 5.9 percent in May.
A pending sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.